A Note To Instructors: Because of volatile energy prices in today's world, the instructor is encouraged to vary energy prices in affected problems (e.g. the price of a gallon of gasoline) plus and minus 50 percent and ask students to determine whether this range of prices changes the recommendation in the problem. This should make for stimulating in- class discussion of the results.

1-1 Because each pound of CO2 has a penalty of $0.20,

Savings = (15 gallons $0.10/gallon) (8 lb)($0.20/lb) = $1.34

If Stan can drive his car for less than $1.34/8 = $0.1675 per mile, he should make the trip. The cost of gasoline only for the trip is (8 miles 25 miles/gallon)($3.00/gallon) = $0.96, but other costs of driving, such as insurance, maintenance, and depreciation, may also influence Stan's decision. What is the cost of an accident, should Stan have one during his weekly trip to purchase less expensive gasoline? If Stan makes the trip weekly for a year, should this influence his decision?

1 Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual 1-2 Other information needed includes total number of miles driven each year and the gas consumption (miles per gallon) of the average delivery vehicle.

3 Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual 1-4 At first glance, Tyler's options seem to be: (1) immediately pay $803 to the owner of the other person's car or (2) submit a claim to the insurance company. If Tyler keeps his Nissan for five more years (an assumption), the cost of option 2 is ($803 - $500) + $60 x 5 years = $603. This amount is less than paying $803 out-of-pocket, so Tyler probably should have submitted an insurance claim. But if his premiums go higher and higher each subsequent year (another assumption!), Tyler ought to pursue option 1.

What we don't know in this problem is the age and condition of the other person's car. If we assume it's a clunker, another option for Tyler is to offer to buy the other person's car and fix it himself and then sell it over the internet. Or Tyler could donate the unrepaired (or repaired) car to his favorite charity.

5 Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual Engineering Economy Sullivan Wicks Koelling 15th Edition Solutions Manual 1-6 The environmental impact on the villagers is unknown, but their spring and summer crop yields could be affected by more than normal snow melt. Let's assume this cost is $10 million. Then the total cost of the plan is $6 million (180 million rubles) plus $10 million and the plan is no longer cost-effective when this additional externality is considered.